The consequences of rigid wages in search models
By: Robert Shimer.
Contributors: Shimer, Robert.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10326; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10326.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "The standard theory of equilibrium unemployment, the Mortensen-Pissarides search and matching model, cannot explain the magnitude of the business cycle fluctuations in two of its central elements, unemployment and vacancies.  Modifying the model to make the present value of wages unresponsive to current labor market conditions amplifies fluctuations in unemployment and vacancies by an order of magnitude, significantly improving the performance of the model.  Despite this, the welfare consequences of such rigid wages is negligible"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/21/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.